How to Invest in This Concentrated Regional Banks Play

iShares US Regional Banks ETF (IAT) is a cap-weighted exchange-traded fund (ETF) focused on the financial sector that is an investment worth considering for those who want exposure to regional bank stocks.

This fund tracks the performance of an index of small- and mid-cap regional banks and excludes mega-caps such as J.P. Morgan and Wells Fargo. Barclays Global Fund Advisors serves as the adviser of the fund, which has amassed total assets of $749.6 million that are invested in more than 60 individual regional banks.

As a result, IAT casts a reasonably wide net in terms of quantity of investments. However, most of the fund’s assets are concentrated in its top holdings. For that reason, the performance of a couple of stocks may have a strong impact on the fund’s overall return.

The fund pays a quarterly distribution, boasting a distribution yield of 1.45%. The ETF charges an expense ratio of 0.44%. This expense ratio is fair compared to other, similar funds.